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SEC. 7430. AWARDING OF COSTS AND CERTAIN FEES.
(a) In General.--In any administrative or court
proceeding which is brought by or against the United
States in connection with the determination,
collection, or refund of any tax, interest, or penalty
under this title, the prevailing party may be awarded a
judgment or a settlement for--
(1) reasonable administrative costs incurred
in connection with such administrative proceeding
within the Internal Revenue Service, and
(2) reasonable litigation costs incurred in
connection with such court proceeding.
* * * * * * *
(c) Definitions.--For purposes of this section--
* * * * * * *
(2) Reasonable administrative costs.--
* * * * * * *
Such term [reasonable administrative costs] shall
only include costs incurred on or after the
earlier of (i) the date of the receipt by the
taxpayer of the notice of the decision of the
Internal Revenue Service Office of Appeals or (ii)
the date of the notice of deficiency.
Respondent contends that the quoted flush language from
section 7430(c)(2) bars an award of administrative costs here
because neither of the two specified events has occurred.
Petitioner agrees that neither event has occurred. However,
petitioner argues that it is unfair to apply that language
literally because respondent failed to issue a notice of
deficiency. Petitioner argues that it is unfair to allow
respondent to benefit from respondent's erroneous failure to
issue a notice of deficiency, and that we should treat the
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Last modified: May 25, 2011